Neoliberalism facts for kids

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Panfleto Tercera Jornada Protesta Nacional
Pamphlet calling for a protest in 1983 following the economic crisis attributed to neoliberal experimentation

Neoliberalism is a term for different social and economic ideas. Originally the term was used by a group of liberals who helped shape social market economy in the mid 20th century. Today, this term is mostly used by people who are critical of the ideas of globalisation as well as trade unionists.

The ideas were developed by the economists Friedrich Hayek, Wilhelm Röpke, Walter Eucken, as well as other less prominent thinkers. They were first presented at a conference in 1938.

What do neoliberals want?

Neoliberals want a free market economy, with everything it stands for (private property of the means of production, the freedom for the market price to establish itself, the freedom of everyone to do what they want, etc.). They see however, that in some cases the freedom of the market fails or it does not yield the results wanted. In such cases, the state should intervene. The main focus of the state should therefore be measures to regulate the following:

  • Monopolies and cartels.
  • Social fairness
  • Equal opportunities for everyone
  • Internalising external effects
  • Decreasing the effects of fluctuating business cycles.

Neoliberals are openly in compliance with the lobbying of groups, state interventions that aim to protect national interests, like import duties or subsidies. Neoliberalism is also against a centrally governed economy. What's more, it frowns upon the Laissez-faire of classical Liberalism.

Later interpretation

The term was re-invented by Charles Peters of the Washington Monthly, to mean a half-way position between the original American liberalism and the welfare state.

Examples of neoliberal forms of Government

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